Trump says tougher steps needed on North Korea after new U.N. sanctions

WASHINGTON (Reuters) - U.S. President Donald Trump said on Tuesday the U.N. sanctions on North Korea agreed this week were a small step and nothing compared to what would have to happen to deal with the country’s nuclear program.

U.S. Treasury Secretary Steven Mnuchin warned China, North Korea’s main ally and trading partner, that if it did not follow through on the new measures, Washington would “put additional sanctions on them and prevent them from accessing the U.S. and international dollar system.”

Another senior administration official told Reuters any such “secondary sanctions” on Chinese banks and other companies were on hold for now to give time for China to show it was prepared to fully enforce the latest and previous rounds of sanctions.

The U.N. Security Council voted unanimously to boost sanctions on North Korea on Monday, banning its textile exports and capping fuel supplies, drawing from Pyongyang a threat of retaliation against the United States.

The U.N. action was triggered by North Korea’s sixth and largest nuclear test this month. It was the ninth Security Council sanctions resolution over North Korea’s ballistic missile and nuclear programs since 2006.

A tougher initial U.S. draft was weakened to win the support of China and Russia, both of which hold U.N. veto power. Significantly, it stopped short of imposing a full embargo on oil exports to North Korea, most of which come from China.

“We think it’s just another very small step, not a big deal,” Trump told reporters at the start of a meeting with Malaysian Prime Minister Najib Razak.

”I don’t know if it has any impact, but certainly it was nice to get a 15-to-nothing vote, but those sanctions are nothing compared to what ultimately will have to happen,” said Trump, who has vowed not to allow North Korea to develop a nuclear missile capable of hitting the United States.

Asked if Trump was considering other actions, including cutting off Chinese banks from the U.S. financial system, White House spokeswoman Sarah Sanders said: “All options are on the table. The president has also said that he wants every country involved to step up and do more.”

Washington so far has mostly held off on new sanctions against Chinese banks and other companies doing business with North Korea, given fears of retaliation by Beijing and possibly far-reaching effects on the world economy.

Russia and China both say they respect U.N. sanctions and have called on the United States to return to negotiations with North Korea.

CHINA AND NORTH KOREA

U.S. President Donald Trump talks to the media about Hurricane Irma next to first lady Melania Trump (not pictured) on the South Lawn the White House upon their return to Washington, U.S., from Camp David, September 10, 2017. REUTERS/Yuri Gripas

Trump is likely to make a stop in China in November during his first official visit to Asia. Secretary of State Rex Tillerson held talks in Washington on Tuesday with China’s top diplomat, State Councilor Yang Jiechi, at which details of the trip were expected to be discussed.

The State Department said Joseph Yun, the U.S. special representative for North Korean policy, was in Moscow on Tuesday for talks with Russian officials.

North Korea said its Sept. 3 test was of an advanced hydrogen bomb and it was its most powerful nuclear blast by far. It has also tested a missile capable of reaching the United States, but experts say it is likely to be at least a year before it can field an operational nuclear missile that could threaten America.

The North Korean ambassador to the United Nations in Geneva, Han Tae Song, rejected the U.N. resolution as “illegal and unlawful” and said Washington was “fired up for political, economic, and military confrontation.”

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North Korea is “ready to use a form of ultimate means,” Han said. “The forthcoming measures ... will make the U.S. suffer the greatest pain it ever experienced in its history.”

Han did not elaborate, but North Korea frequently vows to destroy the United States.

The latest U.N. resolution calls on countries to inspect vessels at sea, with the consent of the flag state, if they have reasonable grounds to believe ships are carrying prohibited cargo to North Korea.

It also bans joint ventures with North Korean entities, except for nonprofit public utility infrastructure projects, and prohibits countries from bringing in new North Korean workers.

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U.S. Ambassador to the United Nations Nikki Haley said the sanctions could eventually starve North Korea of an additional $500 million (£376 million) or more in annual revenue. The United States has said that a previous round of sanctions agreed in August was aimed at cutting North Korea’s $3 billion in exports by a third.

Joseph DeThomas, a former State Department official who worked on Iran and North Korea sanctions, questioned whether the new steps would have a major impact, saying the labour ban would be almost impossible to police and that trade statistics greatly overstated North Korea’s earnings from textiles.

Another senior administration conceded the new sanctions would not be enough in themselves to change North Korea’s behaviour, but would help measure compliance with U.N. restrictions by other countries.

Frustrated U.S. lawmakers called at a House hearing on Tuesday for a “supercharged” response to North Korea and said Washington should act alone if necessary to stiffen sanctions on Chinese firms and any country doing business with Pyongyang.

At the hearing, U.S. officials released intelligence findings they said showed how North Korea smuggles coal and other commodities to Russia and China.

Additional reporting David Lawder, David Brunnstrom, Matt Spetalnick, Patricia Zengerle and John Walcott in Washington; Stephanie Nebehay in Geneva; Philip Wen in Beijing; Kaori Kaneko in Tokyo and Hyonhee Shin and Christine Kim in Seoul; Editing by Jonathan Oatis and Howard Goller